Ukraine and the USA, after many weeks of active negotiations, have signed an agreement regarding mineral resources. The new document significantly differs from previously published versions. It does not mention Ukraine’s debt for already provided assistance, nor does it include specific military guarantees. In this article, we will examine the details of the agreement and the prospects for Ukrainian rare earth metals.
This is reported by Finway
Assessment of Mineral Resource Value in Ukraine
Assessing the value of mineral resources in Ukraine is a complex task. Firstly, only a portion of the deposits have been explored, which complicates the accurate determination of reserves, such as gas or graphite. Therefore, it is usually referred to as “explored reserves.” Secondly, the value of mineral resources cannot be assessed solely based on current prices, as significant investments and technologies are required for extraction.
According to Forbes estimates, the total value of mineral resources in Ukraine is approximately $14.8 trillion, with over 70% concentrated in the Donetsk, Dnipropetrovsk, and Luhansk regions. About 62% of the total value is attributed to coal, while 14% is iron ore.
“Any assessment of the value of mineral resources is a very speculative matter,” notes Andriy Loktev, head of the supervisory board of the “Institute of Geology” and candidate of geological sciences.
Prospects of the New Agreement
According to information, the agreement provides for cooperation in the extraction of 57 minerals, including aluminum, antimony, barite, beryllium, bismuth, cesium, and others. The main advantage is that Ukraine retains ownership rights to all deposits.
The joint fund established under the agreement will finance the extraction of natural resources, and Ukraine commits to replenish it with half of all revenues from new licenses. This fund will also receive contributions from the USA, which may increase in the event of military assistance to Ukraine.
Additionally, for the first 10 years, profits from the fund will not be distributed but reinvested in the Ukrainian economy. The fund will be managed on a parity basis between Ukraine and the USA, opening new opportunities for attracting investments and technologies.
“This decision marks a new stage in our cooperation with the USA. We are gaining not only investments but also a strategic partner,” emphasized First Deputy Prime Minister – Minister of Economy Yulia Svyrydenko.
Importantly, the agreement does not contain military guarantees, which President Volodymyr Zelensky previously insisted on, but at the same time does not acknowledge the debt to the USA for the assistance provided.
Overall, the agreement is beneficial for both parties and opens new opportunities for the development of the Ukrainian economy and the extraction of mineral resources.